China’s Proposed Regulatory Updates

By Ames Gross
July 28, 2017


• Categories: 05-Quality/Regulatory, Market Access

China has progressively been increasing its focus on medical innovation in recent years. China’s aging population and rise of chronic diseases make innovative medical technology crucial to delivering quality treatment to its population. Innovation is also important because it assists in enhancing the productivity of the workforce and sustaining economic growth. Therefore, China has been working to boost innovation and development of medical products through regulatory changes. In May 2017, the China Food and Drug Administration (CFDA) published drafts of four proposed policies, Circular Nos. 52, 53, 54 and 55, which introduce significant changes in the drug and device approval processes. If approved, these proposed policies will change many of China’s drug and device regulations. Since these are drafts only, we do not yet know if they will be implemented.

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Circular 52

The first proposed policy aims to expedite the approval process for medical devices and drugs that meet urgent clinical needs. If early-mid clinical trials yield positive results, medical products under this category may receive conditional approval. With conditional approval, such products can be marketed. Additional clinical studies will still be required after conditional approval is granted.

This proposed policy also encourages the development of new medical devices and pharmaceuticals for rare diseases by allowing applicants with medical products that target such diseases to apply for a clinical trial waiver. Also, if the medical product has already been approved in a country outside of China, the CFDA may grant conditional approval (so the product can be marketed), but the applicant will still need to complete additional clinical studies in China within an advised timeframe.

Further, compulsory licenses may be granted for medical devices and pharmaceuticals in situations of a public health threat. A compulsory license permits the production of a patented product without the consent of the patent owner. The CFDA will grant priority review status for a product if it is developed under a compulsory license. China’s National Health and Family Planning Commission plans to issue more detailed information on the compulsory license process and more clearly define what will qualify a situation as a public health threat.

The Chinese government will also work to help make new drugs available to patients by encouraging hospitals to procure new drug products. The government will work to include more innovative drugs in the national health insurance scheme and more frequently update the reimbursable drugs list in order to make the products more affordable for the public.

Circular 53

The second proposed policy aims to encourage innovation through reforming the existing clinical trial management policies. The CFDA will adopt greater flexibility by no longer requiring certification of clinical trial sites. Instead, if the draft legislation is approved, the CFDA will allow any clinical trial site that meets the criteria to conduct clinical trials after submitting a notification to the CFDA. The clinical trials sites will also need to pass an inspection by the CFDA before the results are deemed acceptable.

This policy also proposes a notification system to streamline clinical trial applications. Under this system, the sponsor would need to meet with the Center for Medical Device Evaluation (CMDE) or the Center for Drug Evaluation (CDE), before submitting applications for high-risk medical devices or new drugs. Then, after the clinical trial application is submitted, if the CDE or CMDE does not raise questions or objections about the application within 60 days of receipt, the applicant may assume that the clinical trial application was approved. If put into law, this procedure will significantly reduce delays in the clinical trial process.

Under this proposed policy, the CFDA will also be more receptive to foreign clinical data. If data from overseas clinical trials meet the standards to register the product in China, that data may serve as supporting evidence for a market authorization application in China. Further, if a medical device is already approved in another country, the clinical data that was used in the overseas application may be used for the market authorization application in China. However, the CFDA may require pre-approved clinical trials for certain Class III medical devices. In the medical device area, this potential regulation will be almost a complete reversal of the 2014 device regulations that require local clinical trials for all Class II and Class III foreign devices, not on the exempt list.

Circular 54

The third policy proposes to bolster the market authorization holder (MAH) system in China. The MAH system was piloted in 10 Chinese provinces, but the CFDA intends to make it a nationwide system. Under this system, the MAH would be legally responsible for product quality and would act as the primary body responsible for all post-market surveillance activities. The market authorization holder for both medical devices and pharmaceuticals will need to report any adverse events and initiate steps to ensure quality control. The MAH will be accountable for evaluating the safety and effectiveness of their products and taking the necessary steps to ensure product quality.

The government also plans to amend its pharmaceutical promotion policies. If this new policy is passed, company medical representatives will be responsible for introducing new information to doctors about drugs, etc. However, medical representatives will not be allowed to be involved in sales, and private contact with physicians will be prohibited as well. Further, information such as the number of prescriptions from a doctor will be kept confidential from drug manufacturer employees and distributors. Obviously, this is very vague and hopefully more details will come out soon.

Additionally, as part of the third policy, the CFDA proposes to provide the applicant with the option to either conduct its own local testing in China or use a CFDA-accredited testing institution. Under the current system, there are only 10 national accredited testing centers. Allowing applicants to conduct their own tests will help prevent delays and also conserve resources. Again, this is the opposite of what is outlined in the 2014 medical device regulations.

Circular 55

The fourth proposed policy aims to increase intellectual property (IP) protection of pharmaceuticals. It proposes establishing a patent linkage system for drugs, similar to the U.S. system, requiring all pharmaceutical approval filings to be correlated with valid patents. The policy also proposes an extended data exclusivity period for innovative drugs. Innovative orphan and pediatric drugs, as well as therapeutic biologic products would be eligible for 10 years of data exclusivity, and the first generic version of a drug would be eligible for 1.5 years of data exclusivity.

The government also plans to publish a “China Orange Book,” which will list all of the approved drugs in the country. By establishing this ‘Orange book regime,’ China’s government hopes to facilitate stronger patent protection and decrease the frequency of patent infringement in China.

Conclusion

China’s newly proposed policies encourage faster approvals and medical innovation by modifying existing regulations to reduce the obstacles that cause delays in pioneering innovative medical products in China. Long infamous for intellectual property theft, China also wishes to strengthen IP protection to aid the country’s shift to an innovation-focused economy. If adopted, these policies will present fundamental changes to China’s current regulatory system, and companies will need to carefully review the changes before entering China’s market. The CFDA will solicit public comments on these proposed policies until mid-June 2017. After that date, we will provide an update on where the proposed regulations stand.